Have debt ceiling negotiations failed?

[Landslide Lyndon]

http://www.washingtonpost.com/blogs/plum-line/post/obama-picks-fight-with-gop-over-tax-cuts-for-the-rich/2011/03/03/AGHTMsqH_blog.html

The primary goal of President Obama’s presser, which just wrapped up, was obvious: He was clearly out to pick a major public fight with Republicans over tax cuts for the rich. Obama mounted a surprisingly aggressive moral case for ending high end tax cuts, casting it as a test of our society’s priorities, and argued — crucially — that anyone who fails to support ending them is fundamentally unserious about the deficit.

He also went out of his way to highlight GOP opposition to raising revenues by ending a perk for corporate jet owners. This proposal would raise only $3 billion, which means it’s trivial in the larger scheme of things, and Obama’s mention of it seemed deliberately designed to provoke howls of outrage and cries of “class warfare” from Republicans — with the obvious goal of maneuvering Republicans into the role of arch defenders of the interests of the wealthy.

Obama is picking this fight in order to reframe the deficit and debt ceiling debate as a battle not over government spending — losing turf for Dems — but over who has the most balanced priorities and who is really working in the interests of the whole country.

[anvi]

In answer to the thread question: they certainly will if this keeps up.

Both sides are campaigning for 2012 races in public and, it would seem, drawing impassable lines in the sand behind closed doors.

This all sucks. 

[Lief 🗽]

I hope so. At this point it might be better to destroy the economy than let the Republicans essentially have total control of the government despite only controlling half a branch of it.

[True Federalist (진정한 연방 주의자)]

Deadlines have a way of focusing things.  I will be surprised if any deal will be struck before July 25 at the earliest.

[anvi]

I know, Ernest.  But, seriously, this press conference by Obama was petulant and dumb.  I watched the whole thing, and he toned it down a little toward the end.  But, seriously, he thinks talking about the budget deficits and debt-ceiling should be wrapped in the ridiculous DCCC rhetoric of executive private jet deductions?  I certainly think the middle-class should be defended in this deal, but he is not engaged in any of the serious issues!  I think he really just lost my support today.  Not that it matters, since I'm now an Illinoian, and not that the GOP on the Hill is any better; they're also being ridiculous bluffers and not bringing anything an agreement can be made out of.  But I've got nowhere to turn now.

Can anyone suggest an effective and pleasant-tasting drink that drives away political blues...like, forever?

Good motherf-ing grief. 

[exopolitician]

No, but I think Obama made his case this morning and held strong to whats really important about the deficit talks. I felt like he had more of a spine this morning than anytime before.

[Bull Moose Base]

I know, Ernest.  But, seriously, this press conference by Obama was petulant and dumb.  I watched the whole thing, and he toned it down a little toward the end.  But, seriously, he thinks talking about the budget deficits and debt-ceiling should be wrapped in the ridiculous DCCC rhetoric of executive private jet deductions?  I certainly think the middle-class should be defended in this deal, but he is not engaged in any of the serious issues!  I think he really just lost my support today.  Not that it matters, since I'm now an Illinoian, and not that the GOP on the Hill is any better; they're also being ridiculous bluffers and not bringing anything an agreement can be made out of.  But I've got nowhere to turn now.

Can anyone suggest an effective and pleasant-tasting drink that drives away political blues...like, forever?

Good motherf-ing grief. 

What did you want him to say or do you think he shouldn't have had the press conference at all? 

Here's an analysis from Ezra Klein that sounds plausible.

http://www.washingtonpost.com/blogs/ezra-klein/post/how-you-know-the-negotiations-have-truly-failed/2011/05/19/AG13r5qH_blog.html


On Meet the Press last Sunday, the roundtable consensus was also it was going to have to be tried in public opinion ultimately to create enough political pressure to force someone to yield, "yielding" for the Democrats being giving the GOP everything.  Based on their relative success with playing chicken in the lameduck deal and the CR averting the shutdown and polling showing the public opposed to raising the debt ceiling, it seems the GOP would be emboldened to take the standoff as far as they could.  When they're refusing to negotiate in good faith and even trying to sabotage recovery as growing evidence suggests, why shouldn't Obama use the only tool at his disposal to pressure them to move off their mark?  I admit my bias here but it strikes me as extremely reckless of the GOP to effectively threaten a new financial crisis while refusing to trade concessions.  The inflexibility here seems incredibly asymmetric from my perspective.  The Tea Party controls the Republican Party which controls the government.  I applaud Obama for trying to amp up the political risk for them if nothing else was working.  What would you have wanted him to do?

[anvi]

Joementum,

I agree completely that it's extremely reckless of the GOP to threaten what is effectively immediate financial collapse in order to push through their entire agenda.  As I've said elsewhere, I don't think Obama or the Dems should yield on that point; if they negotiated with the GOP in good faith and the GOP still staged a walkout over inflexibility, then, if I were Obama, I'd just hold a national prime time address on July 31st, inform the American people of the consequences of not raising the debt ceiling, and then say: "your ball." 

But, though the GOP is certainly guilty of this now too, the president should not hope that two wrongs make a right by singing the DCCC song about private jets and all that.  I think everybody would agree that those corporate perk deductions should be eliminated, but, by itself, that saves $6 billion in a $3 trillion budget.  If you're concerned with raising revenue, tie closing the corporate loopholes to lower across-the-board rates, which actually generates more government revenue.  Then, don't blow sunshine of your base's own tail by basically vowing an extension of the middle-class tax cut, especially when taxes across the board have to return to Clinton-era levels, not just those of the top 2.5% of taxpayers.  In other words, show some deference to the gravity of the challenges and that he is really engaged with the issues.  Antagonizing the negotiators by public grandstanding, regardless of whether House Republicans or the president does it, is not going to get anyone off the dime.  The right decisions on the budget here will force everyone to bite the bullet with their base constituencies, so public remarks should relieve some pressure on them, not turn up campaign rhetoric full-volume.

Basically, I think all this rhetoric from both sides is a shameful waste of a valuable opportunity.  Both sides should be preparing the American people for some difficult and important changes, but emphasizing that if we do them now, we'll have an easier time than we will if we wait five years and will still perhaps be able to face down all the challenges.  You don't prepare a country for necessary transformations that are going to cost everyone something by just blaming the other guy for all the problems and then telling your own constituency that everybody but them will have to give up something.  Everybody will have to give up something important to them if we're going to solve our budget problems, so negotiators should come to the table, and politicians should speak to the public, at least in part, with the hard realities, not just with cheers for the home team 

I voted for the president, at least in part, because he presented himself as one who would rise above all this stuff.  And at that, yesterday, he failed spectacularly.  I mean, after listening to the president's press conference, I listed to Tom Colburn's interview with Charlie Rose, and while I certainly don't agree with everything Colburn said, he sounded much more reasonable than the president did yesterday, and that's something I never thought I would say.

[exopolitician]

Obama open to stimulus measures as part of deal.

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http://www.huffingtonpost.com/2011/06/29/obama-open-to-stimulus-debt-reduction-plan_n_887093.html

[Bull Moose Base]

It appears there's enough risk of a panic even before the deadline stemming from lost confidence in the political system that Obama decided to talk in late June instead of late July, for fear that a last-minute deal may not even be good enough.  Your sentiments are in sync with Ezra Klein's who discusses White House restraint even in the face of the Cantor walkout and concludes they're now going public as evidence that they've lost all faith in the GOP as a negotiating partner.

Expiring Bush cuts for everyone was never going to be a part of a debt ceiling deal (even tax cuts for wealthy won't be in there).  So what would advocating for that be besides political negligence, leaving a fat pitch over the plate for the GOP to use to attack and obfuscate like they did on Democrats for trimming Medicare? You'd accomplish the opposite i.e. even more tax cuts by virtue of increasing the chances of more GOP control of the next congress.  Not only on the politics of tax hikes, even from a policy standpoint, there are plenty of voices- I was going to say respected voices but it's not clear the public respects highly trained and decorated economists- saying stop obsessing over the deficit for a while and take as little money out of economy as possible until the recovery picks up.  We (thankfully) do not need to come up with a plan to eliminate the deficit in the next month. 

I don't see much change from 2008.  Obama has always been a realist on politics.  This extends beyond electoral politics to his attempts to assuage the Islamic world to isolate Al Qaeda and syndicates.  FDR played politics the same way and was able to pass the New Deal and Social Security.  Maybe just a different philosophy but I don't think refraining from playing political cards you're dealt amounts to good governance.  It seems an inherent part of the chaotic rugby scrum to progress.

[anvi]

Yes, I know tax hikes are not on the table in current talks.  And they won't really be in the talks after that either; they'll be a campaign issue, just as both parties want them to be.  But if leaving money in the economy by not raising taxes on any bracket is such an economically stimulating solution, why hasn't it worked in the last handful of years?  Banks and businesses continue to sit on their reserves, and the middle-class uses tax breaks to pay down debt or save, as would be expected of both sides in a recession, so what are we getting out of continuing the tax breaks except ever more aggravated debt?  It's the old-fashoned way the can gets kicked down the road, and the problems get progressively worse in the process.  But if the White House has lost all faith in the GOP as a negotiating partner, then cowing them into settling earlier to avoid a panic won't help either.  The whole process just stinks.

[Bull Moose Base]

Agree the process sucks and evidence shows that tax hikes aren't all that stimulative.   But it also shows that deficits aren't the end of the world and I still think there is an argument for not raising taxes on the middle class while they're already under this level of pressure.  In any case, not sure what else Obama is supposed to do.  I don't see how your scenario where Obama holds a press conference a month later is substantially different if they weren't getting any movement from the GOP now.  You have a divided government and instead of compromising at all they threaten calamity for all unless they get their way.  As long as they're so reckless, I'm fine with making them pay as steep a political price as possible and was fine with Obama's approach.

[anvi]

And I agree with your castigation of GOP tactics on this issue; holding the debt ceiling hostage to getting their whole agenda through, though a typical negotiating approach for them at this point, should not be rewarded by caving.  Just to clarify one point; I'm not advocating the president wait to hold a press conference until the 11th hour and otherwise make no public statements about the issue.  I'm perfectly fine with him holding a press conference now, and whenever the White House deems it appropriate.  I just think his tone and emphases yesterday were counter-productive.  Had he taken a more substantive tack and showed he was fully engaged with the details of the negotiations rather than campaigning and basically flipping off the negotiators, I would have been fine with it.  I only bring up the 11th hour primetime address idea as a tactic if the GOP walks out of good-faith negotiations and threatens to just let the August 2nd deadline pass.  At that point, I would call their bluff.

[porker]

What are the political ramifications if the government doesn't raise the debt ceiling and the economy tanks? I think Obama (with the MSM's help) will win the core framing: The GOP created a fake controversy and refused to compromise whatsoever in the negotiations. But on the other hand, history shows that people hold the president accountable for the economy.

Will Obama be able to link the GOP presidential nominee to disastrous the House leadership, or will this cost him re-election?